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How a Dealership Calculates a Used Car's Value

How a Dealership Calculates a Used Car's Value

If you sell your car to a dealership, they will appraise the car, take it for a short test drive and then make you an offer. But how do they come to that offer? how does a dealership calculate a used car's value?


We asked one of our appraisers to tell us the process of valuing a car.


Your used car's value is made up of 5 factors:


  1. Make and model
  2. Trim
  3. Mileage and condition
  4. Service history
  5. Current market rates


Make and model


Some vehicle manufacturers are more desirable than others. Some models depreciate faster than others and often, the two are from the same brand.


Valuing makes and models is part art and part science. Domestic brands tend to do well in the used market while niche brands don’t.


Some premium brands have a cache that people want to buy into, so they will pay more.


Valuing according to the make and model is down to experience and knowing what car will sell for what money and when.




The trim of the car is important. Higher trim cars some with more features and generally more comfort. Whether that’s leather interior, navigation or new safety features.


That makes higher trim cars more valuable. Many people will often by the highest trim used car they can rather than a brand new base model for just this reason.


The higher the trim level, the higher the value of the car in most cases.


Mileage and condition


Mileage and condition go hand in hand. High mileage cars are worth less because there is a perception that it will be worn out.


Most modern cars can do several hundred thousand miles with the same engine and transmission but public perception is anything over 100,000 is a lot. That means lower values.


The better the condition of the car, the higher the value. This is down to curb appeal and also the money the dealership or the new owner might need to spend on the car to bring it up to standard.


Service history


Cars without service history are an unknown quantity, so pose a risk. That increased risk is reflected in a reduced price.


A full service history can add up to 10% on a used car’s value, depending on the car.


The more paperwork you have to show what kind of life the car has had, the easier a dealership will be able to sell it. Which means more money for you.


Current market rates


Current market rates mean what that exact make, model, trim and year is selling for across the market.


We check numerous sources from across Canada both online and in real life. We use all of them to come up with a nominal value for the car which we use as part of the offer.


There’s a lot that goes into valuation when you sell your car to a dealership. We hope that clears up how we do it and encourages you to sell your car to us.


We will use all our skill and experience to deliver the lowest possible auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.


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Categories: Sell Your Car